Aviation Mixed messages with basic economy fares By Robert Silk / March 19, 2017 Share 1 -- For both United and American, basic economy fares are still in the testing stage, but so far neither airline is pricing the product aggressively. Searches on United.com last week for basic economy tickets showed that the carrier is typically selling the new service for approximately $20 less one way than standard economy seating. Searches on AA.com yielded similar results. For some customers, that might represent enough of a price break to be worth boarding last, sitting in the back of the plane, not being able to get a seat assignment until check-in and giving up the option to change or cancel a flight. But for flyers who typically travel with one carry-on suitcase, $20 off the base fare won't even make up for the $25 they'll have to pay to check that bag since both United and American limit basic economy ticket holders to a single carry-on small enough to fit underneath a seat. In fact, said travel industry analyst Henry Harteveldt of Atmosphere Research, United and American might be sending a message with the way they've priced basic economy. "This is a product they don't really want you to buy," Harteveldt said. United spokesman Jonathan Guerin offered a different explanation, however. "We'd like to sell that fare to the customers who choose to purchase it," he said. "If you're good with just a backpack and a laptop, why not save $20?" He added that once in their seats, basic economy passengers get the same onboard service as those sitting further forward in the main cabin.Lending credence to Harteveldt's theory, however, is the way United and American are displaying basic economy itineraries. Shoppers who click on such a fare after an initial flight search encounter a pop-up screen that lays out the differences between the basic economy and economy products and then gives them the option of sticking with the cheaper service or upgrading. Harteveldt said the airlines are using the lower base fares of basic economy as a way to show up higher in priced-based flight search results on OTAs and travel search sites. "They use the basic as the attention-grabbing price, if you will, and then they offer inexpensive trade-ups to get a much better experience," he said. Basic economy products are largely seen as the legacy carriers' approach to competing for price-conscious flyers with discount airlines like Spirit and Frontier. In 2012, Delta became the first of the Big Three to implement the fare class. American and United are only now following suit.American introduced its basic economy product in 10 markets, eight of which have direct competition from ultralow-cost carriers (ULCCs). On the other two routes, from Miami to Tampa and Miami to New Orleans, American competes with low-cost and ULCCs that fly from nearby Fort Lauderdale to Tampa and New Orleans. Searches last week for tickets on American basic economy routes suggested that the carrier often still isn't matching the prices of discount competitors. For example, American's May 2 fare of $101 one way from Philadelphia to Fort Lauderdale bested Frontier by $2 but lost out to JetBlue's $69 fare and Spirit's $44 fare.American's basic economy fare from Charlotte to Orlando on May 3 was $131, compared with Frontier's fare of $46. United launched its basic economy service from its seven hubs to Minneapolis, where, according to airline president Scott Kirby, the carrier has an operations team that has proven successful at implementing new initiatives. Three of those routes -- from Minneapolis to Newark, Washington Dulles and San Francisco -- lack ULCC competition. In those cases, United is competing on price with its legacy rivals. For example, United and Delta both offered one-way, basic economy fares on May 2 from San Francisco to Minneapolis for $173. (Under the airlines' varying basic economy rules, Delta flyers could travel with a free carry-on-size suitcase, but United customers would have to check such a bag for $25.) For a one-way ticket from Minneapolis to Houston, United and Delta on May 2 again were charging the same price, $204, for basic economy on the several flights they offer during the day. But they were making no effort to compete on a price basis with Spirit's lone daily service between the markets, which departs at 9:05 p.m. and was on sale for $44. On the other hand, in the highly competitive Minneapolis-Denver market, United's one-way basic economy fare on May 2 was just $5 more than the $63 fares offered by Frontier and Spirit. Delta also flies that route and was offering the same $68 price as United. Southwest was charging $69, but unlike its U.S. competitors, Southwest doesn't charge for carry-on or checked bags, or change fees.